With all of the information that is available, the public remains confused. It may have to do with the sources of their information, but the latest polling data says that 47 percent of Americans say their greater concern is that raising the debt limit would lead to higher government spending and make the national debt bigger, while 42 percent say their greater concern is that not raising the limit would force the government into default and hurt the economy. Additionally, 74 percent of Republicans and GOP-leaning independents who agree with the tea party faction of the party say their bigger concern is that raising the debt limit would result in more spending, compared to 58 percent of those who do not agree with the faction.
According to the Congressional Research Service, the debt ceiling has been raised 74 times since March 1962, and 10 of those times have occurred since 2001. Theoretically, the debt ceiling limit is supposed to help Congress control spending. In practice, the debt limit has been ineffective in controlling spending and deficits because politicians and reality remain as strangers to one another. History shows that it has been that way for quite a while.
The fact is that the debt ceiling doesn’t regulate anything, believe it or not. The Budget Control Act of 1974 created a process that requires Congress to vote on aggregate levels of spending, revenue and deficits every year. That makes the debt limit redundant.
Five years after the 1974 Budget Act passage, a combination of a failure to increase the debt limit in time and a breakdown of Treasury’s machines for printing checks caused a two-week technical default and a short term failure for the government to meet its obligations. That raised interest rates by six-tenths of a percentage point. Over time, that percentage hike translated into billions of dollars in increased interest payments on the nation's debt, which became a cost passed on to taxpayers.
In other words, default increases the debt service which increases the deficit.
President Franklin Delano Roosevelt (FDR) questioned the meaning of a legal debt limit, according to Time Magazine on January 20, 1941. The president “hinted that there should be no legal limit.” In its coverage of the FDR’s budget for the fiscal year 1941-42, Time noted, “Last July's Democratic platform made no mention of that fiscal dodo, that old museum piece: a balanced budget. Franklin Roosevelt held to precedent—he didn't mention it, either.” The Newark News remarked, “Like the budgets of Mr. Average Citizen, it was full of unjustifiable errors of judgment, of expenses borne out of habit, of big installments still being paid on past mistakes.”